​With the 2024 election approaching quickly and last night’s first presidential debate, I give a rundown on the top 7 things the candidates and those wanting to make a difference should know. The key is that states should lead the way by getting the federal government out of the way and returning power to the people.

Listen, like, share, and subscribe: vanceginn.substack.com. 

Originally published at AIER. 

​The US economy faces numerous challenges, exacerbated by policy uncertainty and excessive government intervention. Milton Friedman famously said, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” This sharp observation underscores the inefficiencies often associated with government intervention. Instead, we should advocate for free-market solutions that empower individuals and businesses to drive innovation and growth.

Election years heighten policy uncertainty, driving economic volatility. Businesses and investors become cautious, waiting to see which policies will prevail. This hesitation can slow economic activity, affecting job creation and investment in new projects. More than half of Americans think we are in a recession even when the headline data say otherwise, reflecting a disconnect between reported statistics and personal experiences.

Policy uncertainty during election years exacerbates these issues. The upcoming elections could significantly impact economic policies, depending on the direction taken by the administration. Whether it’s Biden’s continued interventionist policies or a shift under Trump, the stakes are high. Businesses, investors, and consumers are left guessing, which stalls responsible decision-making and hampers economic growth. 

The recent meeting of the Business Roundtable highlighted these concerns as both Biden and Trump pitched their economic visions. According to the Tax Foundation, Biden’s tax plan, which includes increases on corporations and the wealthy, could reduce GDP by 2.2 percent and eliminate 788,000 jobs over time. On the other hand, Trump’s tariff proposals that hike taxes on Americans would have economic consequences, increasing consumer prices and reducing household incomes.

The Federal Reserve’s decisions also play a crucial role in shaping the economic landscape. Recent hikes in interest rates to curb inflation have added another layer of uncertainty. Higher borrowing costs can dampen consumer spending and business investment, slowing economic growth. The Fed’s policy trajectory remains uncertain, contributing to a cautious outlook among businesses and investors.

Biden’s regulatory approach further complicates matters. His administration has introduced numerous regulations affecting various sectors, from energy to finance. While intended to address climate change and market stability, these regulations often have significant compliance costs and operational challenges. The regulatory burden can stifle innovation and deter investment, particularly in industries struggling with economic headwinds.

Another key aspect is the role of institutions. Friedrich Hayek, in his seminal work “The Road to Serfdom,” cautioned against the overreach of central planning. He emphasized that central planning often leads to inefficiencies and a loss of individual freedoms. His insights are particularly relevant today as we navigate the complexities of modern economies. To truly flourish, governments should embrace free-market capitalism and resist the creeping influence of socialism.

This principle applies across sectors. By focusing on the efficient use of resources, reducing regulatory burdens, and fostering competition, we can build a more prosperous future. The bottom-up approach ensures better utilization of resources and empowers entrepreneurs, businesses, and local communities. Policies such as eliminating unnecessary regulations, reducing corporate tax rates, and promoting school choice are vital. These policies drive economic growth and ensure that resources are used where they are most needed.

Policy uncertainty during election years can create a precarious economic environment. Given the numerous issues in Washington, states must lead the way in our system of federalism. The increasing divergence between red and blue states on taxes, labor, and education highlights this trend. Red states cut taxes and promote business-friendly policies, while blue states often expand government programs. This divergence allows states to set examples of effective governance through free-market principles. By reducing regulatory burdens, passing sustainable budgets, and fostering competition, states can mitigate some national policy uncertainties that stall economic progress.

The next big step in federalism involves states innovating beyond traditional policies. For instance, states should focus on restraining government spending, eliminating bad taxes like income taxes, and reducing onerous regulations. Policies promoting school choice can also drive education reform and better outcomes, ensuring that all children have access to quality education regardless of their socioeconomic background. In addition, more freedom in technology and innovation should be ensured to support the next big revolution that improves our lives and livelihoods.

To move forward, we must build from our past experiences and rise to overcome obstacles. We can foster innovation and resilience by acknowledging and learning from our failures. It’s essential to recognize that failure provides valuable lessons and opportunities for growth. Expanding government intervention in response to failures often stifles this learning process and leads to greater inefficiencies.

Policy uncertainty during election years can create a precarious economic environment. States must lead the way in our system of federalism, setting examples of effective governance through free-market principles. By passing sustainable budgets, reducing regulatory burdens, and fostering competition, states can mitigate some national policy uncertainties that stall economic progress.

Let’s leverage the strengths of the free market, prioritize efficiency, and ensure that our policies truly benefit Americans. By embracing free-market principles, reducing regulatory burdens, and fostering competition, we can pave the way for a stronger and more prosperous America. Together, we can build a future where smart policies and strong institutions that support life, liberty, and property pave the way for economic resilience and growth.

​Join me for Episode 102 of the Let People Prosper Show to hear a deep discussion with the fantastic Dr. Veronique (Vero) de Rugy, the George Gibbs Chair in Political Economy and Senior Research Fellow at the Mercatus Center at George Mason University, who migrated from France to America.

We Explore:
-How the entrepreneurial spirit contributes to immigration between countries.
- What the differences are between national conservatism and classical liberalism.
- Which policies would improve the economic and fiscal picture.

Like, subscribe, and share the Let People Prosper Show, and visit vanceginn.substack.com and vanceginn.com for more insights from me, my research, and ways to invite me on your show, give a speech, and more.

Hello everyone,

It’s a pleasure to be with you today. As one who believes strongly in free markets and individual liberty and has served as the chief economist of multiple think tanks and at the White House’s Office of Management and Budget, I’ve come from Texas not with barbecue, as you also have delicious barbecue, but with a recipe for economic prosperity that I hope you’ll find equally savory.

It’s great to visit Kansas and contribute to the fantastic work at the Kansas Policy Institute. My business at Ginn Economic Consulting works with KPI and 14 other think tanks nationwide. In these capacities, I hear of the attention that Kansas receives for its past tax cuts without spending restraint and current efforts for tax relief.

Kansas has been in an economic slow cook for decades, trailing behind national averages in job growth, population increases, and economic output. Much like a poorly tended grill, high taxes, and selective business subsidies have smoked out potential growth, leaving behind more stagnation than sustenance.

Let’s chew over some numbers: From 1979 to 2022, Kansas's job growth limped along at just 53% compared to the national average of 88%. Imagine the vibrancy of having an additional 451,000 jobs in the state—jobs that could have been fostered with more competitive tax policies. Moreover, Kansas has seen a net exodus of nearly 198,000 residents since 2000, driven away by a tax environment as welcoming as a blizzard in May. 

The states with the lowest tax burdens saw an influx of 4.6 million people from domestic migration during the same period, while the high-tax states watched 10.7 million residents pack up and leave. In the most recent IRS data, Kansas lost $2.1 billion in adjusted gross income due to people moving out since 2017.

In May 2024, Kansas's unemployment rate ticked up to 2.9%, a slight increase from 2.8% but a revealing one. The total nonfarm payroll employment saw a marginal uptick by 100 jobs last month. Beneath this weak report, there was more weakness as the private sector lost 300 jobs while the government added 400 jobs. This isn’t job growth; it’s a reshuffle at a high cost to private-sector workers. 

And this is a trend we've seen before. Over the past year, Kansas has seen an overall increase of 24,000 jobs, with the private sector contributing 18,700 and the government sector adding 5,300, or about 20% of the total.

Milton Friedman once quipped, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” In Kansas, if you continue to rely on excessive taxing and spending for growth, you will find yourself short on more than just jobs and people but on opportunity that drives prosperity.

During the recent special session, the Legislature passed several measures to attempt to boost the state’s economic prospects. One notable legislative action was passing a $3 billion STAR bond to attract major sports franchises. Investing in sports is like predicting Kansas weather—unpredictable and always exciting. There is potential for economic rain, but you might be in a financial storm without careful budgeting and rigorous oversight. 

While what is seen is the possible construction, new jobs around, and new tax revenue, the unseen is costly. This includes the poor precedence for other wasteful acts by the government, higher taxes on those nearby and over time, and the lack of knowledge about what will happen over the next 30 years to the teams, the community, or other costs that come with government planning.

Moreover, the recent special session saw positive efforts for broad tax relief, with the key being reducing income tax brackets from three to two, which is a step toward a much-needed flat income tax. Starting in tax year 2024, married Kansans filing jointly would have their taxable income taxed at 5.2% up to $46,000 and at 5.58% above that amount. The changes should significantly impact Kansas by reducing the tax burden and unleashing economic growth as people are incentivized to save, invest, and work. However, the effectiveness of these measures will depend heavily on accompanying spending restraint.

Let’s talk about property taxes. Kansas has started the pit on property tax relief, but it’s time to cook it. Tentative tax relief discussions this year hinted at significant cuts, but Kansas should solidify this with a constitutional amendment to limit levy increases. Think of it as putting a leash on a dog prone to running off—you ensure it’s safe and always in sight. The amendment should cap annual increases as low as possible if property taxes increase at all, providing predictability and stability for homeowners and businesses alike.

Regarding income taxes, flattening the income tax would turn Kansas from a flyover state into a destination. This move would simplify the tax code, making it fairer and less of a headache—because the only thing Kansans should worry about rising are the sunflowers. While the Legislature tried it this year, you should keep this as part of the approach next time.

The reason why is easy to see. States with lower tax burdens consistently show superior economic growth trends; between 1998 and 2022, the ten states with the lowest tax burdens averaged 51% growth in private-sector employment, compared to 34% for the states with the highest burdens. Kansas managed a modest 16% growth during this period, ranking 44th.

Kansas is sitting on a $4 billion reserve—it's like having a savings account when you’re deep in credit card debt. You should use this wisely with a responsible budget model that KPI has put forward for years now, allowing spending to grow no more than by population growth plus inflation, preferably by much less to overcome past spending excesses. 

This isn’t just tightening the belt; it’s ensuring you can still afford it in the future. Responsible budgeting ensures fiscal sustainability and prevents the state from falling into the cycles of budget shortfalls and hasty tax hikes that have plagued Kansas in the past. By following this approach, over-collected taxpayer money, called a “surplus,” can be returned by cutting a flat income tax rate to zero as quickly as possible.

Kansas has seen its share of financial missteps, but now is the time for bold action. The legislative decisions made today will determine the state’s economic future. Legislative candidates, you are positioned to lead Kansas into a new era of fiscal responsibility and economic growth. 

The decisions made in the coming years will determine whether Kansas continues along the path of stagnation or redirects toward prosperity. Consider these policy recommendations not just as suggestions but as necessary steps toward securing a thriving economic future for Kansas.

Kansas must also embrace responsible budgeting for these tax cuts to be sustainable. The state should learn from the lesson of excessive spending during the last decade’s troubles, which led to deficits and foolish tax hikes. In fact, the 2025 General Fund budget is 69% higher than in 2017 when Governor Kelly took office, or $3.7 billion higher than inflation over this period. 

Reining in this excessive use of taxpayer money to spend it on only limited roles outlined in the state’s constitution would provide opportunities for strategic budget cuts and increases of less than the rate of population growth plus inflation. This responsible approach helps ensure fiscal sustainability without compromising essential services.

Thank you for your dedication to Kansas and your commitment to principles that enhance not just the economy but also liberty. You can help ensure Kansas becomes a beacon of fiscal responsibility and economic success, where every resident wants to stay and others are eager to join. Roll up your sleeves, sharpen your pencils, and get to work on policies that let Kansans prosper. After all, as Friedman would say, "Nothing is so permanent as a temporary government program"—aim for long-term policies with fewer tradeoffs to support the most opportunities.

​Thank you, and if you’d like to continue this conversation, I invite you to connect with me at [email protected] and subscribe to my newsletter at www.vanceginn.substack.com. Let’s work together along with the great folks at KPI to create a future where Kansans can truly prosper.

​Don’t miss Episode 66 with 6 things you didn’t read in the news this week:

📊 April's BLS State JOLTS report shows varied job market dynamics with Texas and Florida leading growth. Less government intervention is key to prosperity.

🏫 Louisiana's new universal education savings account program expands K-12 options, showcasing the benefits of school choice.

📉 The latest CBO report highlights a dire fiscal situation, projecting $3 trillion deficits and $51 trillion debt by 2034. Pro-growth policies are crucial.

📈 Michigan needs improvements to sustainable budgeting and economic freedom to boost job creation and living standards.

Get the show notes here: https://vanceginn.substack.com

#EconomicGrowth #SchoolChoice #FiscalPolicy #JobMarket #ThisWeeksEconomy